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5 Ways to Make Huge Progress on Your Student Debt in 2020

2020 hasn’t been the year most of us had in mind – especially when it comes to finances. The economy has struggled while many have lost jobs. 

There is one big silver lining for those with student debt: interest rates have been waived through the end of the year. That’s right, in an effort to provide relief to student loan borrowers during COVID-19, interest is being set at 0% through December 31, 2020

This interest slash means that your student loan payments go directly to paying off your principal, which is enormous if you have high-interest rates or a large amount remaining. You can make a dent in your remaining debt now through the rest of the year. Here are five ways to make serious progress.

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Photo by Karolina Grabowska from Pexels

1. Make a Plan or Follow a System

You’ve got to have a plan. It’s not rocket science – but it can be challenging to sit down and devise a strategy for paying off your student debt. You need a debt to success system.

Pull out the pen, paper, and budget and chart your path to success. Make a plan and get some accountability to stick with it. Without one, you’re likely to slide, become passive, and delay. If this has been you, let the slashed interest rate be your motivation to get started.

2. Budget Like Your Life Depends on It

Your budget is the linchpin of your success. Budget well, and you’ll be paying the maximum possible each month. Budget poorly, and you may not be paying off a cent.

There are plenty of tools out there to help. Mint, YNAB, and EveryDollar are just a few that could help you budget well.

3. Make Sacrifices

Once you’ve got your budget locked in, it’s time to make some cuts. It’s not fun to think about what expenses you can eliminate – but it’s well worth it. Take a look at your lifestyle and make a list of everything not vital to your life.

Consider cutting out TV/streaming subscriptions, eating out, unnecessary clothes, alcohol, etc.… Make some sacrifices. 

4. Find an Extra Source of Income

Making sacrifices can help you cut expenses. But perhaps the most practical way you can make progress on your student debt is to make more money. Now may not be the best time to pick up a part-time job at a restaurant or coffee shop, but thankfully you have other options.

You could deliver food or groceries while many continue to keep their distance. You could become an Uber or Lyft driver as people begin getting out more. You could even look for online freelance or gig work on sites like Fiverr or Upwork. 

5. Consider Refinancing 

Student loan rates have dropped big time for new borrowers in 2020, but unfortunately, this doesn’t apply to existing borrowers. However, existing borrowers could refinance their student loans into a private loan to take advantage of the current market’s low-interest rates.

This route can be complicated, as refinancing into a private loan means deferring any federal benefits. So it may be a better option in December than it is right now. Talk to an expert to see if this tactic might make sense for you. 

Take advantage of this interest rate situation if you can. Your future self will thank you.

Four Reasons To Focus On Paying Off Student Debt

It’s an unfortunate but inescapable fact of life that most who choose further education are now graduating and beginning life with debts. Often, they won’t be the only debts that are quickly amassed when you’re starting out in a career, trying to find an independent living situation and all the other expenses that come in this period of time. But should there be a focus on paying off tuition fee debts early, even during challenging Financial Times when you’re learning to budget? Well, the answer is yes, for these reasons…

Lower Your Debt Risk

If you already have significant amounts of student debt from tuition fees, you’ll find it harder to get lenders to give you additional money that you may desperately need for housing or setting yourself up in a job. Your debt to income ratio is an important factor in being able to access lower-cost borrowing and also frees up more of your disposable income every month, the less you have. This means that you’re more able to work towards other financial goals you may have, such as saving for a home deposit or a car.

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Minimise Inescapable Debt

If you encounter some truly unfortunate circumstances – serious illness or loss of a job – early on in life, your financial situation can quickly spiral out of control. But even declaring bankruptcy doesn’t spare your student loans – they still need to be paid back. This makes it a smart idea to pay back those loans, because you’ll still have to keep on top of them even under dire circumstances which is extremely difficult. Paying them down means you’ll be better able to deal with other money challenges in your life.

Escape Servicing Charges

It isn’t just the amount you owe on your student loans, it’s the money you lose out on over the long-term servicing that debt. Money that you spend on paying down a loan is essentially dead money – it’s not working for you. Whereas that same money invested into funds is generating a return for your future. And time compounds that situation, so as long as you’re making repayments, you’re missing out on that money working for you. Speak to a specialist service like RefinanceStudent.Loan to make sure your repayment schedule is optimised against your other financial needs and commitments. The sooner student debt is paid off the sooner you can concentrate on making your money work for you in other ways.

Live a Less Stressful Life

If there’s one thing for sure, it’s that living with debt is toxic for our stress levels. As life can be quite stressful enough when you’re just staring out trying to build a career, you want to try and minimise other sources of it. Getting focused on a debt repayment plan can help in itself – if you know there’s a way out, it can help to ease any anxieties and you know that you’re more in control of the situation and able to handle other curveballs. http://credit-n.ru/vklady.html

Mind Over Money: Taking Control of Your Finances

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Money isn’t everything in life, and it’s of course possible to be happy and fulfilled without a ton of it in the bank. However, it is still important. Money is what keeps a roof over your head, and food in your stomach. It’s what allows you to get around, and buy the things you need. Therefore, being able to effectively manage what you have (whether it’s a little or a lot) is one of the most important skills to have as an adult. If you know you’re not great with money or are beginning to struggle, here are a few simple tips to help you regain that control.

Create Budget

The first step to taking control of your finances is to know exactly what you’re spending. It’s so easy to buy a magazine here, a coffee there, spend a few dollars on lunch one day. But all these little purchases add up, and if you’re not careful are what will cause you to overspend. Start by working out your expenditures: exactly how much you have coming in and then what goes out. What each of your monthly bills, rent, groceries and everything else costs. That way, anything leftover is what you have to play with and only that. Ideally, you will have a bills bank account where all of the money for essentials is transferred as soon as you’re paid. That way your expendable income is completely separate, it never gets dipped into at all.

Reduce Your Outgoings

Once you know exactly what you’re spending on bills, you can take steps to reduce them if needed. A huge tv and internet package for example might take up a huge part of your budget. Do you really need this? Could you drop it down to a smaller package or even cancel it completely? With inexpensive streaming services like Netflix, you won’t be short on things to watch and could save yourself a huge lump of money each month. Could you be more careful with your gas and electricity usage to reduce your fuel bills? One area where most families overspend is with groceries. If you create a store cupboard with plenty of dry ingredients and seasonings, you can prepare healthy meals for far less than buying everything fresh. For example, wholemeal pasta, rice, couscous, quinoa and other healthy grains pair perfectly with a homemade sauce using canned vegetables, herbs, and spices, Add a little meat from the freezer, and you have a healthy and balanced means during leaner times with money. Making a shopping list before setting out is another way that you will save money since you’ll have a set plan and won’t be as tempted by impulse or unnecessary purchases.

Get a Handle on Debt

Borrowing money can sometimes be useful. It allows us to study or buy houses and cars that we’d never be able to afford outright. But it can also cause a lot of problems too. When you take out loans, credit cards, and store cards for example, it’s easy to live ‘beyond you means’ and end up overcommitted. Before you know it, you might be in a situation where each month you only have enough to cover the interest meaning no money is being taken off the debt, and it doesn’t go down. Speak to a debt charity if you’re in trouble, they will offer you invaluable and non-judgemental advice. If your debt is a student loan, it could be worth looking into Obama student loan forgiveness and seeing if you qualify.

Save For Unexpected Bills

Unfortunately, life has a way of throwing a curveball every now and again. Things are going fine one minute, and the next it’s all going wrong. An unexpected bill drops on your doormat, your car breaks down or your washing machine packs up. This can spell disaster if you’re not prepared. Having a savings account that’s for these kinds of problems can give you a buffer and make life so much easier. Rather than borrowing money, you can sort problems right away and not get into any further trouble.

Educate Yourself On The Impacts Of A Student Loan

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While we would love the opportunity to go back in time and use what we know now, we’re not jealous of Millennials in the slightest. Why? Because they are the most indebted generation of college students in history. Part of the reason they are so indebted is because students are naturally inexperienced with money, meaning they take out more loans than they perhaps have to.

This simple form of mismanaging money can have a substantial impact on a person’s life. That is why it so important you know exactly what the minimum amount money you need to borrow is, as well as understand how a student loan can negatively impact your life.

No Grad School

A student loan can massively affect your chances of going to grad school because the average accumulation of student debt is $30,000, which can see them seriously struggle to get their hands on another loan after their undergraduate program or, worse, seriously struggle with repayments.

No Home Buying

Having debts already in place can seriously affect a person’s chances of getting a mortgage. There are numerous reasons for this. Firstly, having substantial debts already can affect your credit score and thus your eligibility for a mortgage, although this can be helped by experts like those at https://www.bestdebtconsolidationloans.com/national-debt-relief-review.php who specialize in debt consolidation. Secondly, you may not be able to afford the monthly payments due to your current repayment plans. And thirdly, having to put money aside to pay back your student loans may see you struggle to save up for the required down-payment.

No Dream Job

When someone applies for a job, a company more often than not will undergo a background check. This will include a person’s criminal record, professional history, and credit checks. In fact, almost 40% of companies will perform a credit check. This may not be a problem if you have a flawless repayment history, but if you have made late payments it will show up and this could be held against you. It could be the determining factor between you and another candidate.

No Good Credit

Most major banks and financial establishments treat a student loan just like any other form of a loan. They call it an instalment loan, which affects your FICO score, something you can read more about here http://www.investopedia.com/terms/f/ficoscore.asp. As such, if you fail to make your repayments on time as set out in your agreement you will see your credit score get affected, and a low credit score can prohibit you greatly. You see, the lower your credit score is the more a lender will consider you to be high risk, and thus it will be harder to extend other lines of credit. This could affect home buying, as we mentioned above, as well as other purchases like a vehicle or a business. It will also affect your insurance premiums.

The world we live in now means that the majority of students have to take out student loans if they want to go to college; it is their only means of affording it. We are not trying to warn you off college. What we want you to understand is the consequences of borrowing money and the importance of being disciplined when it comes to how much you borrow. Less is best.

Get Your Money Ready To Go Back To School

It’s not uncommon to have a few false starts on your way to getting a degree and giving yourself some serious career prospects. Not all of us get a degree straight after high school even if we want to. Life gets in the way. But if you want to go back to school, it’s far from impossible. Even with more responsibilities, you should never be afraid to focus on taking paths that develop you even further. But you need to make sure your finances are as ready to go back to school as you are.

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Budget for student life

There’s no doubt that you’re going to have to deal with additional costs as a result of getting yourself back in education. Scholarships, loans and the like are options we’re going to cover further, but there are plenty of financial surprises that can pop up as a result of going to school. Extra childcare costs, supplies costs, and the like will add up. It’s a good idea to create a budget with the express aim of leaving more money aside as part of a college emergency fund. This might mean taking a look at the daily expenditures that you could better reduce. Now’s the time to audit your subscriptions and get rid of those that aren’t giving you your money’s worth and to start making energy efficient house rules.

See what scholarships are out there

Naturally, the biggest cost you’re going to be concerned with when it comes to going back to school is the cost of tuition and perhaps accommodation. To that end, you should take a look to see what scholarships you might be applicable for, first and foremost. Databases like the StudentScholarshipSearch are some of the first searches you must look up. Older and nontraditional students can have as many opportunities at getting a scholarship as the dependent student would. There are scholarships dependent on age, in fact, just as there are some for race, background, and more. Don’t count yourself out of getting one, get yourself matched.

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See what benefits are on offer

Besides scholarships, there might other ways to access benefits that could reduce your tuition costs. Like scholarships, grants don’t need to be repaid in the vast majority of cases. There are age-based programs like the Plus 50 Initiative from the Association of Community Colleges, for instance.  You could also consider going to your employer if you’re currently in work. Many larger companies offer reimbursement for tuition costs if you’re learning skills in education that can help in the workplace. Even if they’re not related to your current job, education policies in the workplace can cut thousands from the cost of tuition. If you’ve served in the military, then there are also programs run through funding from the Post-9/11 G.I. Bill worth looking into. Don’t leave any stone unturned. There are local, state, and federal level benefits and finding the right ones can help you avoid the next step.

Prepare for student debt

In the event that you can’t get a scholarship, grant, or reimbursement of any kind, then you are going to be dealing with a lot more student debt. But you don’t have to leave yourself resigned to having an oversized rock hung about your neck. You can take steps now to chip away at student debt so it’s much more manageable in future. For one, as with all debt, it’s dependent on your credit score. With help from places like CreditRepairCompanies you can ensure you’re not being taken for a ride by student debt. Make sure that your student debt is less than your expected annual starting salary or your current annual salary. That way, you can formulate a ten-year plan that you can reasonably stick to.

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Rent books, don’t buy

What about all the other expenses that chip away at your finances while you’re there? One that many new students will find a surprise is the sometimes-overwhelming cost of college textbooks. A small number of publishers control the market, meaning they can hike the prices up however they like. With professors choosing what product you have to buy; these companies are free to charge what they like because they know you have to pay. So, don’t play their game. Instead, rent your textbooks from places like BookRenter or take your time to shop around and find used copies.

Make use of your student discount

If you want to make sure you’re balancing the budget and spending your money wisely, then it’s a smart move to get an idea of all the different businesses that take part in the student discounts program. A student discount can help you save in all kinds of businesses. You can get clothes, tech (including any computers you might need to study), even entertainment at a reduced rate. There are also travel discounts and insurance deals offered specifically to students that can help you cut down the more regular costs in your day. Before you buy something or sign into a new deal, see if the provider offers a student discount. If they don’t, you can be sure there’s an alternative that does.

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Sell those notes

You can even make use of the money-smart college economy to earn a little more on the side. A whole new marketplace has started to sprout in the last few years. Thanks to the internet, it’s a lot easier for students to keep up with their studies when they might otherwise be struggling. For those willing to pay, they can simply buy their notes from someone else. That’s where you can come in. If you’re good at taking detailed notes, you could make some money. You just have to make sure that the college you’re attending doesn’t have any rules on it. In some, it could result in expulsion. Just check their policies before you start selling your work.

There are a lot of ways to make further education have a much more reasonable place in your finances. Many of the options simply don’t get considered by the majority of students. Hopefully, we’ve outlined a few options worth exploring.